This will be an ongoing blog post as I read Paying the Price: College Costs, Financial Aid, and the Betrayal of the American Dream by Sara Goldrick-Rab and journal my thoughts as I make my way through the chapters. A note: The research in this book began in 2008 until published in 2016. Many of the figures are outdated, but not by much. However, the main point still holds true, the cost of college is still increasing faster than family income can support.
Chapters 1-3
As a mom with a son who is a few weeks into his first year of college, I was particularly interested in reading this book due to its timeliness with my life circumstances. This book so far focuses much of its attention on students who receive Pell Grants, and while he is not the recipient of a Pell Grant, according to the Pew Research Center, we are a family who is solidly in the middle class. Let me first acknowledge the privileged situation our family is in. Even though half of our 23-years of marriage was lived in the lower-income bracket with our two sons, we have been able to dig ourselves out of debt over the last 10 years and into the middle-income bracket thanks to my husband's career shift from ministry to health care. However, this has also given us little time to save for college. In fact, it's only been in the last three years we've felt financially comfortable setting aside savings for college. However, that being said, both my husband and I went to college debt-free by the generosity and savings of our parents. My husband's parents have a high value placed on education and experience and therefore have set money aside for both my sons to help pay for college. We are extremely thankful for this. I also acknowledge the privilege my son has had by being a part of a school system that afforded him opportunities as a high-ability student to take and practice standardized tests often and choose courses that challenged him academically, all of which helped lead to his merit scholarships.
I share this because I am in no way saying I understand the financial and life stresses of Pell Grant recipients. We have been afforded a position of privilege even while we were in the lower-income bracket for many years just by the families we were born into. I'm just sharing a little bit of my own story since I've currently found myself in the expensive and somewhat confusing process of paying for college and hope to shed some light on the realities of college costs.
"In the words of the Truman Commission: 'For the great majority of our boys and girls, the kind and amount of education they may hope to attain depends, not on their own abilities, but on the family or community into which they happened to be born or, worse still, on the color of their skin or the religion of their parents.'" (Zook, 1947, p. 27, as cited in, Goldrick-Rab, 2016, p. 14).
In our recent experience, we had a little set aside in a 529, but without merit scholarships and the generosity of grandparents also saving a 529 fund for our son, we would have really struggled to come up with the funds to pay for college even after the financial aid and work-study that was offered to him from the government. As it is, my son still needed to make a choice between the more expensive colleges he was drawn to either by location or prestige or those that were more affordable but would result in less debt in the end. We created a spreadsheet for him that listed each university he applied to, the Cost of Attendance (COA) which Goldrick-Rab (2016) points out is often called the “sticker price” (p. 46) and includes tuition and fees, books and supplies, room and board, and transportation; scholarships he was awarded by each institution, local scholarships awarded, financial aid and work-study awarded, the amount we, his parents, could contribute and the amount his grandparents could contribute. The total was multiplied and divided equally between four years so he could see the net cost of attendance after four years. One would think after all that, there wouldn't be any costs left over, but depending on the institution some costs were greater than others, keeping in mind college costs are likely to rise every year. Goldrick-Rab (2016) points out how it's typical to underestimate costs because annual tuition increases are common. In fact, "Fees increased faster than tuition, growing by 104 percent at community colleges and 95 percent at public universities" (p. 45).
The point of the spreadsheet was for my son to have a better idea of the cost he would be responsible for on his own (and how much debt he was likely to incur). In the end, he chose the college he was initially least excited about but it offered him the biggest scholarship (percentage-wise in relation to the cost of the school) while also having the program he wanted to study. This meant after all was said and done he would walk away with the least amount of debt, and that was what was most important to him. Similar to what Goldrick-Rab (2016) found, "Over half of our students indicated that college costs played an important role in their decision about where to attend college" (p. 33).
Sidenote: As I write this it also reminds me of Lareau (2008) and Weininger's chapter on Class and the Transition to Adulthood where they discuss how students of middle-class parents are more likely to have the support of their parents in the college decision-making process. It's another note or privilege my son was able to benefit from.
"The hard truth is that while financial aid reduces the ever-increasing cost of college, more often than not it still leaves families with unmanageable prices" (Goldrick-Rab, 2016, p. 4).
There are some main themes throughout these first three chapters. Mainly attempting to dispel the myths that Pell Grant recipients are undeserving, not college-ready, and a burden to taxpayers and the federal government. Goldrick-Rab (2016) discusses how "When the Pell program began, it was intended to shield recipients from having to take loans. Today nine out of ten Pell recipients graduate with debt" (p.5). She mentions how Senator Claiborne Pell's idea for the grant was for "The right of every youngster, regardless of his family’s financial circumstances, to obtain a postsecondary education" (p. 13). And that "By the time the Pell Grant was created in 1972, 80 percent of American college students were enrolled in public colleges and universities" (p. 14). Unfortunately, as Goldrick-Rab (2016) points out, "[In 2016] the maximum Pell cover[ed] less than one-third of the cost of attending a public four-year college or university and barely 60 percent of the cost of attending a community college" (p. 17).
One thing that's important to realize, the living expense portion of the COA is left up to the school to report. From her research, Goldrick-Rab (2016) found "At least one-fifth of all institutions provide living allowances at least 20 percent below what we estimated was necessary for a very modest standard of living. Further, colleges located in the same area reported widely varying living costs" (p. 44). If the COA is lower than actuality then this can affect students' financial aid, "In fact, hard-working students who receive outside scholarships may have their federal aid reduced to ensure that their total aid package does not exceed the total cost of attendance. When a college’s cost of attendance is too low, these students lose financial aid they might have otherwise received, and badly need, to cover their actual costs of attendance" (p. 45).
Goldrick-Rab goes on to discuss the FAFSA and the expected family contribution (EFC) that is determined from filling it out. I loved this quote from a college student's tweet, "Why is the financial aid process harder than college itself" (p. 49)? As someone who has filed taxes herself for many years, including some of the complexities that go along with owning my own business, I found filling out the FAFSA for my son taxing (no pun intended). It definitely took me much longer than the 20 minutes advertised. And I hope you noticed I said "I" filled it out. Many of these Pell Grant students did not have the help of their parents and often had to poke and prod them to get the information they needed. If I struggled, I can only imagine the struggle of those students attempting to do it on their own.
"The Pell Grant hardly ever covers the entire difference between the cost of attendance and the expected family contribution" (p. 52).
The text mentions the maximum allowed for the Pell Grant in 2016 was $5775. For the 2021-2022 school year Pell Grant will range from $650 to $6495.
When I interned at Ivy Tech over the summer in academic advising I sat in and observed meetings with a lot of Pell Grant students whose education I assumed was paid for. This made me curious about what the Pell Grant would cover today for a student attending Ivy Tech.
One semester of Ivy Tech (12 or more credits) for tuition and books is $2,243.25. However, this does not include fees, cost of living, and transportation.
We just paid $6294.11 net cost for one semester of IUPUI that included tuition, fees (course and standard), some books (not all), housing and meal plan, and $5500 in scholarships applied. Without the scholarships, the total would have been $12258.10 for fall semester and assuming course fees stayed the same (which they won't) $24516.20 for the 2021-22 academic year. This doesn’t include extra meals, iPad, extra textbooks, and transportation. However, kudos to IUPUI for stating the average cost of attendance before aid (living on campus) is $24,168 (includes tuition and non-course fees, books and supplies, room and board, transportation, and personal). Not too far off the mark, but this does not include "personal," textbooks that weren't included in a digital format, supplies, and transportation costs. On the other hand, about $330 of the net price I included was added course fees not included in IUPUI's estimation. Funny enough, I was still shocked by the price tag. The cost of tuition went up by about $100 from when we estimated it last year and we also underestimated course fees and the extra expense of their Bridge program which allowed him to move in a week early and was an extra $336 we weren't anticipating.
Now can you imagine a Pell Grant student wanting to go to a 4-year state university? It's possible the student could earn the same merit scholarships and therefore the remaining bill would be covered by the Pell Grant. But imagine if the student didn't get a merit scholarship, the student will then still be responsible for more than $5700 per term. And that's if they qualified for the entire Pell Grant! That said, Indiana does offer a number of grant programs to help lower-income students such as the 21st Century Scholars (though it does require signing up by 8th grade to participate) and the Frank O'Bannon Grant. I'm not sure how these grants would affect also receiving a Pell Grant. However, extra grants and scholarships do get confusing for students in need. It's so confusing it was hard for me to wrap my head around the text. Goldrick-Rab talks about the confusion: some not knowing what grants they actually received, what the rules were, and how it was funded. It's also possible for students receiving financial aid to receive too much, "If students receiving financial aid get more grants than their 'demonstrated financial need' allows, then they must ask their school’s financial aid administrator for help" (2016, p. 54) which may mean having to turn down some grants.
"If you are confused, you are in good company" (p. 55).
"So the only way I can pay [the grant] back is to graduate with my bachelor’s in criminal justice. That’s my goal" (p. 60).
Chapters 4 & 5
Many points in these chapters focus on students trying to make ends meet by working one or more jobs, often during the night shift. They seemed to feel both pressure to take the government loans offered to them (and feel guilty and stressed about it) or not take them (a sense of pride, but also increased work hours to pay for living expenses and school). There was a lot of anxiety around money. Both if they took a loan and the thought of not finishing school and having the pay it off, and also not taking a loan and not quite knowing how to make ends meet.
"Embarking on the first year of college required that students come up with the funds to cover the net price. Websites and glossy brochures from colleges and universities often say that students use “a combination of loans, work, and other gifts” to accomplish this task.5 That doesn’t sound too bad. But what this task looks and feels like is something else entirely. The goal is straightforward: come up with enough money to pay tuition and fees, buy the necessary books, and supplies, and cover the bills associated with living a modest life. How did they do it?
Despite the intentions of the Pell program, which hoped to protect lower-income students from loans and work by providing grants, today’s Pell recipients endure a process similar to most undergraduates. Their first challenge is to get their families to contribute the expected family contribution. Then, they need to decide whether to take federal loans. That decision is often closely intertwined with another key decision: whether and how much to work." (Goldrick-Rab, 2016, pp. 87-88)
I had friends back in the 90s who worked during the summer to pay for their next year's college without having to take out loads. Goldrick-Rab (2016) mentions this when she says, "Twenty years ago working part time while in school was a viable way to pay for college and avoid loans. Today, students are much more likely to both borrow and work—and given the desires of students and their families to avoid taking out loans, it is clear that this behavior is not based on a change in preferences" (p. 88). It's notable that Indiana's minimum wage has been $7.25 since 2009, while the cost of tuition in 2019 had risen almost 30% since 2009.
"One woman asked: 'Is it even worth it to work all these hours and go to school? You’re supposed to be going to school to get a good job, not sitting here working all these small jobs to go to school. Do you know what I mean? That’s what I never understood about college.'" (p. 110)
Goldrick-Rab (2016) also discusses the real issue of food and housing insecurity. My thoughts were similar to how I felt when I read Goldrick-Rab's 2020 article on #RealCollege During the Pandemic. Overall, I felt the familiar feeling I've felt throughout grad school—I've been living in a bubble. This summer I interned at Muncie's Ivy Tech Community College and learned so much about helping take care of students' basic needs. Ivy Tech Muncie has what they consider "wraparound services" to take care of the whole student. IvyCares is one of these services that offer emergency funds, help with food insecurity, transportation, and mental health. Ball State recently launched their Basic Needs hub which gives guidance and resources to college students who are facing basic needs insecurities. I'm ashamed to admit that up until that point, I had not considered college students would struggle to meet basic needs. I naively thought that if students found a way to pay for college (whether by financial aid, grants, scholarships, or loans) they were then in a position to also provide for their basic needs. Even while typing, I hear how foolish that frame of thinking sounds. Even if a student's education is fully grant-funded, this only means they were in a financial position in the first place to qualify for the grant. Which of course then means, to begin with, there is little money for basic needs. The same can be said for those paying for their education out of pocket or through loans. The cost of a college education is at an all-time high with monthly payments on loans eating into the budget for housing and food. This book seems to be proving that point and tying it all together.
Discussion Questions:
Chapters 1-3
• What years were you in college and how did you pay for college?
• Did you work while you were in college to help pay for school?
• Did you have to contact financial aid while in college? If so, what was that interaction like?
• If you had grants, loans, or scholarships to help pay for college, were you aware of the "rules"?
• Did you have any biases towards students using Pell Grants? If so what were they? If so and did Chap 1-3 dispel any of those biases previously held?
• What's one thing you learned about Pell Grants that was surprising to you?
• Did anything surprise you about the COA, EFC and Net Cost of college?
Chapters 4-5
• Did you work to help pay for college or living expenses while in college? If so, what kind of job did you have and how many hours did you work? Did your schoolwork suffer because of work?
• Did you have to help provide for your family with the money you made for your job or money that came from financial aid?
• Are you surprised that the government financial aid loans have not changed the maximum amount to borrow in the last 10 years?
• Are you surprised that Indiana's minimum wage has been $7.25 since 2009, while the cost of tuition in 2019 had risen almost 30% since 2009.
• Are you familiar with the resources available for food-insecure students on campus?
Notable:
• "A public debate is raging about the future of financial aid, with experts often trying to blame financial aid recipients rather than the system. Data on their academic performance have been used to question whether they belong in college in the first place. Data on their use of student loans have been used to question their financial literacy and how they live their lives. Data on their degree completion rates have been used to question whether the Pell Grant Program is a waste. Some even ask whether, since college credentials result in increased earnings, we should subsidize college participation for anyone. Let those who can afford it get ahead, while the others remain behind, they argue. Amid this national furor, students from lower-income families are simply trying to make a better life." (p.12)
• "Whatever the case, no federal authority requires that states make college affordable, and tuition and other costs grew rapidly, even at public colleges and universities" (p. 15).
• "The revenues available from the Pell, along with the array of other federal programs under Title IV of the Higher Education Act including student loans, flow into the coffers of colleges and universities without extracting any accountability for keeping costs affordable" (p. 17).
• "The American vision of success runs this way: good parenting and hard work leads young adults to college, college attendance (both for young adults and midlife back-to-school students) leads to better jobs, stronger families, happier marriages, and healthier and longer lives. College is supposed to grant entry to (or at least keep you in) the middle class and certainly more or less guarantee you earn enough money to make ends meet. If only this were true." (pp. 17-18)
• "Furthermore, the average financial benefit of college degrees—the bonus that appears evident when you compare the earnings of a person who holds a bachelor’s degree to those of a high school graduate—does not accrue equally for everyone. The returns on investing time and money in college are uneven and unstable since they depend on opportunities in the ever-shifting labor market—a market rife with uncertainty and ongoing change and, too often, discrimination to boot. People who grow up in economically fragile circumstances often continue to live in economically fragile communities, even after they attend college. They are better off than their peers who do not go beyond high school, but they remain far behind most Americans [emphasis mine]. All this means that college alone will not conquer inequality. But this doesn’t mean we shouldn’t be doing more to realize the ideals of meritocracy and equal opportunity that launched the federal Pell program. As figure 8 illustrates, today the likelihood of earning college degrees is still tied to family income." (pp. 20-21)
• "Our students felt that their only hope of getting a decent job and a stable life for their families was to go college. In prior decades, some of them might have found alternatives, going to work in construction or manufacturing jobs or working on a parent’s farm. But those jobs had largely disappeared, and so here these students were, pursuing more education to get ahead." (p. 23)
• "Students who weren’t receiving the 'expected' amount of money from their parents were often hurt by the financial aid system’s approach to allocating resources" (p. 30). It's hard for me to imagine anyone in the middle class is able to afford the EFC factored by the government.
• "A generation ago public colleges and universities received on average about 75 percent of their operating budget from state appropriations. Today that number is closer to 50 percent. As that discount was removed, the price facing an individual person purchasing a college education grew. Moreover, the approach to further discounting that price with financial aid has become ever more complicated." (p. 39)
• "With few exceptions, the total amount of financial aid a person receives cannot exceed the cost of attendance for the school they attend. If aid is to truly make college affordable, the accuracy of that number is extremely important." (p. 40)
• "Not only are living costs important, trends in these costs are independent of tuition trends and of family and student income trends. When tuition is frozen, these living costs are not—and just as they do for many Americans not attending college, they can outstrip what families can afford. This is one reason why efforts to freeze tuition or reduce tuition to zero often don’t succeed in making college affordable. Students can’t focus on their studies when they’ve given up work hours for classes and can’t afford to pay their living costs." (pp. 41-42)
• Subsidized and Unsubsidized loans: "Prior to the 1992 reauthorization of the Higher Education Act, federal loans consisted almost entirely of subsidized loans targeted to needy families. These loans are the “best” of the available federal loans since they do not accrue interest until a student leaves college and a grace period ends. Interest on unsubsidized loans begins accruing as soon as a student takes them." (p. 89)
• "Given that the Pell program was created to ensure that people from low-income families could afford to attend college without putting themselves and their loved ones into economic jeopardy, it is notable that more than half of our students took a loan for their first year of college." (p. 91)
• "The less college you complete, the less debt you have, but the less likely you are to repay.22 Without a college degree, and having forgone years of work experience and seniority to attend college, former undergraduates without degrees can find only low-paying jobs. Even paying off a modest amount of loans puts them in compromising positions. This is the real student debt crisis." (p. 93)
• "Low-income families hold student debt amounting to about 70 percent of their income, while wealthier families have student debt amounting to around 10 percent of income (a rate deemed manageable by the financial industry)" (p. 94). I remember feeling shocked that government loans wouldn’t cover the cost of college for a semester.
• "Despite their Pell Grants, these students needed to borrow—over 85 percent of them had unmet need exceeding $3,500 (the maximum subsidized Stafford Loan for first-year students), and 72 percent had unmet need of greater than the $5,500 that first-year students may borrow in subsidized and unsubsidized loans." (p. 96) It’s telling that 10 years later the amount to borrow is the same (though the interest rate has changed from 6% to 3.73%
• "But the real issue is that these students are at great risk of default because their prospects for degree completion are low and because they disproportionately attend for-profit and community colleges where financial aid is scarce and the price of attendance is high." (p. 99) I'm interested in learning more on why for-profits are chosen if the cost is so much higher? I'm also interested why she claims community college costs are higher. Though she might just be saying the financial aid is scarce?
Questions Goldrick-Rab asks:
• "Should breaking the link between family income and degree attainment be a public priority supported by taxpayer dollars" (p. 14)?
• "What does it really mean to say that paying for college is difficult? Under what circumstances do students find it challenging, and when does it feel manageable? Is it about the absolute amount of money held in hand, or are students’ perceptions of affordability shaped by other factors? How do they cope with financial challenges? How do these affect school? Does family help out? Since every program, including financial aid, operates in the context of ordinary lives, it was important to understand these factors." (pp. 36-37)
My Questions From the Text:
• "There is no guarantee, in other words, that college-educated people from low-income families will not be left behind. And in American higher education, a vicious cycle of exclusion and adaptation in which resources are unequally distributed in ways that preserve privilege helps to ensure that people from lower-class backgrounds stay behind." (p.20). I wanted to be more knowledgeable on this topic and hoped she would go on to explain how. She might still explain this in later chapters, but she leaves a footnote for further reading: Alon, "The Evolution of Class Inequality in Higher Education," 731-55; and Mettler, Soldiers to Citizens, 163-76.
• "Those who do make it in the door are leaving without degrees at higher and higher rates" (p. 21). Why? I think she goes on to answer this here:
"For decades, studies have shown that family income relates to how students engage in school. We know, for example, that students from families with fewer resources are less likely to feel academically and socially part of campus life. Fewer economic resources often mean a lower likelihood of participating in extracurricular activities, visiting professors during office hours, and spending time on campus. In turn, this results in fewer opportunities to build relationships that could pave the way for social networks yielding greater returns to the college degree. This helps explain why there are large income disparities in who persists past their first year of college and completes degrees. It might be why lower-income students are more often described as 'academically adrift.'
These observed differences are often attributed to social class writ large, a configuration of economic, cultural, and social resources that come together to create advantages and disadvantages. Too often, however, what students go through in order to pay for college is overlooked, as writers favor more simplistic ways of understanding class differences. Money, they say, is not really what matters. But in reality, money does matter—a lot. What happens in college is not simply a function of students lacking social networks, academic skills, or cultural know-how or having more commitments to work or family. It is rooted in the struggles they endure because they cannot pay for what they need and in the lengths they must go to in order to find money." (pp. 33-34)
• "Those who remain in college take longer to finish their degrees, racking up additional debt along the way" (p. 21). Why? (Footnote refers to Increasing Time to Baccalaureate Degree in the United States which found that less collegiate resources and increases in student employment were reasons why)
• "85 percent of Pell recipients, and even many families with children who live slightly above it, have very little disposable income to use for education. Data from the Consumer Expenditure Survey indicate that middle-class families earning $50,000–$70,000 per year are able to spend only about 1.3 percent of their income on education. This is very similar to the fraction spent by low-income families, but it is less than one-third what rich families (earning more than $150,000 per year) spend." (p. 74) Is she trying to say that higher-income earners spend less (percentage-wise) on their education than lower-income earners? Math-wise it sounds like she's saying they pay more than the lower-income earners in education. I'm having a hard time following her point here.
• "Since it is nearly impossible for a low-income or middle-income student to attend a for-profit college or university or a private nonprofit without borrowing, students who do not borrow enroll in those sectors at very low rates. They mainly go public" (p. 95). What is she trying to say here? If the state university offers the same degree program, why do students choose for-profit or private if it costs more? Is she saying that by students of lower income not being able to choose private schools as easily as state schools because of the cost the equity gap increases? Does the fact that high-income students can choose elite institutions continue to reinforce the equity gap because of the alumni and connections available to them? Does this also get into my thoughts on Fifty Years of College Choice about choosing the best college?
References:
Goldrick-Rab, S. (2016). Paying the price: College costs, financial aid, and the betrayal of the American dream. Kindle.
Lareau, A. (2008). Social class: How does it work? (pp. 118-151). Russell Sage Foundation.
Zook, G. F. (1947). Higher education for American democracy: Establishing the goals. U.S. Government Printing Office.
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